CHINESE car buyers used to visiting traditional car dealers now have a new venue to include on their shopping itinerary — the car supermarket.
The new format allows buyers to look at a large array of cars in one place and compare specifications and prices.
Chinese retail giant Suning was among the first to jump on the “one-stop shop” bandwagon. It opened a car supermarket in downtown Nanjing last month.
The market displays both domestic and foreign models, including Maserati, Cadillac, BMW, Mercedes-Benz and Audi. It also provides car leasing service, auto parts and after-sales maintenance.
“For consumers, this is a way to save time, get to know more brands and make decisions after careful comparisons,” said Liu Donghao, head of Suning’s automotive business section. “We aim to break the mold of single-brand dealerships.”
In the next three to five years, the company said it expects to open more than 100 car supermarkets in China.
Gome Electric Appliances, a major rival of Suning, said it plans to add car sales areas in most of its 1,700 stores in China.
“Gome has the advantages of a large number of stores in China,” said Zhang Haifeng, head of Gome’s car business. “Our stores are located in downtown areas, and that’s a strength in the automotive business.”
Gome unveiled its automotive business strategy in March. It covers car sales, automotive finance, insurance, automotive accessories and maintenance.
Last month Gome said it plans to expand its network.
Those jumping on the new trend have their work cut out. Car supermarkets are facing fierce competition from traditional car dealers and encountering some wariness by consumers.
So far, foot traffic in the new supermarkets has been fairly light. One of the recent visitors was Wang Xiaoli, who works in marketing research and is interested in buying a car.
“The number of customers is fewer than what I expected,” she said. “Most of the car brands here are luxury brands, but customers want to see all kinds of brands and models in different price ranges.”
Luo Lei, deputy secretary-general of the China Automobile Dealers Association, said traditional dealers won’t yield to market without a fight.
“Mainstream car manufacturers have spent a huge amount of time and money working with traditional car dealers,” he said. “Manufacturers are unlikely to abandon those ties to work closely with car supermarkets.”
Ye Sheng, auto research director at market research firm Ipsos, takes the same view.
“Traditional car dealers have competitive prices, compared with car supermarkets,” he said. “For consumers, price is one of the most important factors when buying a car.”
Wang said she might consider buying a car from a supermarket if the price is 10 percent lower than that at traditional car dealers.
Beyond prices, many customers want the professional skills and knowledge of established car dealers, according to independent automotive consultant David Zhang.
”Traditional car dealers are much more familiar with models because they get regular training from car manufacturers,” he said. “That marks a challenge for car supermarkets. I don’t think the supermarkets will have much of an impact for some time.”